General Mills Announces Global Restructuring, Will Cut 400-600 Jobs

MINNEAPOLIS (WCCO) — General Mills announced Monday that it will be cutting around 400 to 600 jobs worldwide in a new global organizational restructuring.

Due to the restructuring, General Mills will be also eliminating the position of International Chief Operating Officer, which is currently held by Christopher O'Leary.

On Jan. 1, 2017, four business groups will begin reporting to Jeff Harmening, President and Chief Operating Officer. They include: North America Retail (U.S. Retail & Canada) led by Jon Nudi; Europe & Australia led by Bethany Quam;
Asia & Latin America led by Christina Law; Convenience Stores & Foodservice led by Shawn O'Grady.

"We continue to prioritize both growth and returns," Harmening said. "The structural changes announced today will help us unlock global growth opportunities and go after them by efficiently restructuring our teams and processes. In addition, the capability investments and savings generated by these changes will help us deliver our fiscal 2018 adjusted operating profit margin target of 20 percent."

It's unclear how many jobs will be affected in Minnesota.

University of St. Thomas Finance professor Dr. David Vang was not surprised to hear about more layoffs at General Mills.

"It is not unusual for firms in the industry that General Mills is that also happen to be international players," Vang said.

In the last few years, the company has shut down several plants around the country and cut thousands of jobs.

"They have invested a lot in having an international presence so I'm sure in some of these markets they're pretty close to saturation, so they're downsizing their personnel," Vang said.

Vang said slashing costs and increasing efficiency is common for companies in the packaged-food industry, citing the recent merger between Kraft and Heinz.

"It takes more people to build a market than it does to maintain one," Vang said. "Tastes are changing not just here in the United States but in other parts of the world and you are seeing a little bit less of the processed food, but what's also still good for General Mills is they're also in the unprocessed food market as well."

More layoffs does not always mean a company is performing poorly, Vang said it is sometimes a sign of changing times, especially for a company that has been around for 150 years.

"They'll still be a good long-term solid company here in Minnesota," Vang said. "But, as I said, some of their markets, they're going to have to move on so they're essentially regrouping and now trying to conserve funds to go someplace else as well as trying to hit their shorter-term profit targets."

General Mills said the current round of layoffs will impact about 2 percent of the company's almost 40,000 employees worldwide.